Coles edges profit higher amid challenging year
Australia's second-biggest supermarket chain has reported a slight rise in annual profit, describing the result as "pleasing" given what it called a challenging economic environment that pushed up prices.
Coles made a bottom-line net profit of $1.1 billion in 2025/26, up one per cent on the previous year, as reported by The Canberra Times. Excluding a significant item of $235 million related to a court judgment in a Fair Work case, net profit came to $1.3 billion, a rise of 13.7 per cent.
Sales jumped by nearly three per cent to $45.6 billion, with its supermarkets division leading the way at $41.5 billion, a gain of 3.7 per cent. Liquor sales fell 3.3 per cent to $3.5 billion.
Chief executive Leah Weckert described the year as one of "consistently strong performance," with above-market sales and strong earnings growth. "This performance is particularly pleasing, given the challenging operating environment, including continued cost of living pressures, geopolitical uncertainty and greater regulatory complexity," she said.
Underlying earnings before interest, tax, depreciation and amortisation rose seven per cent to $4.2 billion. Coles declared a final dividend of 37 cents, taking the total payout to 78 cents for the year, up from 69 cents in the prior year.
Ooshie campaign leaves a mark
While Coles' numbers were solid, market analysts noted one negative: sales slumped during Woolworths' Ooshie promotion, a giveaway of rubber Disney, Marvel and Star Wars characters for customers who spend $30 or more. Coles' sales picked up after the campaign ended but did not recover to the same level seen before the promotion.
"The collectibles campaign really came to an end 10 days ago," Ms Weckert said on Tuesday in an earnings call. "At this stage, it's probably a bit hard to say whether the full recovery has occurred in terms of it coming back up."
In the past, supermarket collectible campaigns, including Coles' own promotions involving Pokemon and Coles Little Shop, had lifted sales temporarily, she told reporters.
A YouGov survey of 1,102 Australian adults, conducted between August 17 and 19, found 39 per cent of adults and 64 per cent of parents with children under 18 reported they had changed their shopping habits as a direct result of the campaign.
Woolworths set to report
Woolworths, Australia's biggest supermarket chain, will announce its 2025/26 results for the year to June 28 on Wednesday, a day after Coles revealed its figures. Analysts and investors will be watching to see if Woolworths' profit margin has recovered after it slipped in 2024/25 due to supply chain costs, wage increases, and shifts towards own-brand products.
The retailer's shares have outperformed Coles over the past 12 months. Woolworths shares were trading at about $38.60 on Tuesday, up 31.1 per cent since the start of 2026, against a broader market gain of 4.9 per cent. Coles shares have risen 9.9 per cent over the same period, according to data cited by The Canberra Times.
eToro analyst Josh Gilbert commented that investors have gone back to basics by buying up supermarkets. Woolworths pulled back its earnings guidance in April, Gilbert noted, but its net debt is expected to fall from around $16 billion to roughly $4 billion after asset sales.
Ms Weckert also indicated Coles has entered the new financial year in a solid position, with its flagship supermarkets division gaining market share and sales in the first eight weeks of 2026/27 "broadly in line" with the final quarter of the just-ended financial year.
"We know what matters to our customers - delivering great value, quality and convenience every time they shop with us," she said.